23 October 2020
When it comes to starting your home buying journey, we all know one of the biggest hurdles is saving for the deposit. That said, saving for your deposit has two benefits; it goes towards the house price so gets you one step closer to your dream home and it also helps demonstrate your ability to repay the mortgage on a monthly basis which will help with your application.
As a general rule of thumb, you will need a deposit of at least 10% of the house price as a First Time Buyer, and if you’re a Second Time Buyer this increases to 20% of the house price but we’ll take you through all the requirements during your mortgage appointment. You’ll want to get into the habit of saving a regular amount every month to demonstrate your repayment ability. Through paying rent or saving the equivalent of your monthly mortgage repayment amount, you can show that you can repay your proposed mortgage repayment.
When it comes to saving, we believe in permanent support, so we have developed some useful tips to help kick start your mortgage savings:
It is a good start to open a savings account specifically for your deposit – one that you can keep out of sight, out of mind and set up a regular payment into. If you tend to dip into your savings it might be a good idea to pick an account that has a notice period for withdrawal, so you won’t be tempted to transfer cash the week before payday and dip into your nest egg.
Every payday, you should set aside a percentage of your income into a savings account before you pay bills, rent, etc.
If you’re saving with a partner, you can set up a joint account to save as a couple which can helps to hold each other accountable and motivate you both to reach your savings goal.
If you need help picking a savings account you can talk to our team who can discuss all your options or check out our online tool to help choose the right account for you here.
Whether it’s cutting back on eating out or online shopping, unfortunately when saving for your dream home, you’ll need to be ruthless and cut your spending where you can. Small changes such as making brunch at home or ordering take away just once a week rather than three times can make a big difference.
Here’s a handy spending calculator to help keep track of your spending each month and figure out items you might be able to cut back on.
Bills, bills, bills, we all have to pay them but what if you could save on them? You’d be surprised on how much you could save every year by just switching providers for utility bills such as gas, electricity, TV, broadband and insurance.
Now is the perfect time to overhaul your bills, you can save a lot by just switching provider or negotiating a better deal with them. Do you spread your bills over the year? You could also save by paying up front if you can afford it.
Another useful way to save on bills is to look at your monthly subscriptions. How much are your apps really costing you? Perhaps you could ditch a monthly music or fitness apps subscription you never use and save a little extra each month. Why not compare the different provides on a consumer price comparison site like Bonkers.ie and make sure you’re getting the best deal for you?
You should also check out benefits that your employer may offer, from healthcare plans to local discounts that could help you save a little extra each month.
Set a realistic time frame for how much you need to save and work out what you need to put away each month. To help keep you focused and find out how much can borrow and how much your monthly repayments would be. Use our Mortgage Calculator, it asks a few simple questions like how much you earn, how you spend and what you want to borrow.
If you are a Second Time Buyer it is a 20% deposit but don’t worry this can be from the sale of your current home but it is still good to show monthly savings to show your ability to repay.
Remember that we’re always here to help you through your home buying journey so if you’re struggling to figure out how much you could borrow or what you need to save for a deposit, come in and talk to our mortgage team and we’ll help you figure it out.
Calculator results do not constitute an offer of a mortgage loan, nor is it legally binding and is for illustrative purposes only. Product eligibility criteria applies. Lending criteria, terms and conditions apply. Security and Insurance is required. permanent tsb plc. is regulated by the Central Bank of Ireland.
The content of this blog does not constitute advice and is for general information purposes only. Readers should always seek professional advice before relying on anything stated in the blog. Some of the links above bring you to external websites. Your use of an external website is subject to the terms of that site.